European stocks fall as investors assess US-Iran talks

SadaNews Economy - European stocks fell during trading on Wednesday as investors assessed developments related to negotiations between the US and Iran, while shares of defense company Rheinmetall declined following a media report that Germany intends to abandon plans to build its largest warship since World War II.

The Stoxx 600 European index stabilized at 634.21 points.

The German DAX index dropped by about 0.7% to 24723.31 points, the British FTSE index fell by about 0.1% to 10414.83 points, and the French CAC index remained steady at 8340.69 points.

Crude oil prices traded near $76 per barrel, a level not seen since early March, amidst hopes that oil tankers trapped in the Gulf may pass through the Strait of Hormuz following a peace agreement between Washington and Tehran.

However, caution prevailed in the markets amid ongoing disputes between the two sides over key terms of the agreement.

Traders are also looking for indications regarding the monetary policy direction of major global central banks, as data from the London Stock Exchange Group (LSEG) showed that markets are pricing in a potential additional 25 basis point rate hike by the European Central Bank by the end of the year.

In terms of sectors, the aerospace and defense sector led losses on the Stoxx 600 index, declining by 1.7%, after shares of the German Rheinmetall Group dropped by 12.3% following a report indicating that Germany intends to cancel plans to build its largest warship since World War II, opting instead to purchase eight smaller frigates from rival TKMS, whose shares rose by 8.7%.

Conversely, the real estate sector led gains on the European index, rising by 2.4%, supported by a 17% increase in Segro’s shares after American company Prologis announced its $16.6 billion bid to acquire the British warehouse owner, following a previous rejection of the offer.

The technology sector also rebounded, increasing by 0.3% after recording its largest daily loss in nearly five months in the previous session, bolstered by a recovery in memory chip stocks in Asia and a 3.3% rise in South Korean stocks.

Shares of Infineon Technologies rose by 0.9%, while shares of both P.E. Semiconductor and ASML increased by 0.4% each.